23 January 2013

Cargill and Arasco announce new starches and sweeteners JV in Saudi Arabia

- JV to acquire Arasco’s existing corn milling facility in Al Kharj
Cargill’s first operations in Saudi Arabia 
Cargill will take a 20 percent stake in the JV

Cobham, United Kingdom - 23 January 2013 - Cargill and Arasco have announced today their intention to create a new starches and sweeteners joint venture in the Kingdom of Saudi Arabia. The new joint venture company will acquire Arasco’s existing corn milling facility in Al Kharj and will produce starch based products primarily for the Gulf Cooperation Council (GCC) countries of Saudi Arabia, UAE, Kuwait, Oman, Qatar, Bahrain, as well as Yemen, Iraq and Jordan. 

This joint venture will mark Cargill’s first operations in the Kingdom and will build on Cargill’s global capabilities in food ingredients and Arasco’s already proven successful local knowledge and supply chain infrastructure. 

Speaking about the importance of this new geography and growing industry, Frank van Lierde, Executive Vice President, Cargill said, “The Middle East region represents the highest growth area for the food and drink industry in the world. The rapidly changing demographics in the region and the growth of consumer choice means that this joint venture will be well placed to help our customers meet this rapidly developing market.” 

The intent is to triple production at the Al Kharj plant to meet the growing demand across the confectionery, juice, bakery and catering segments in the region. Glucose and starch production capacities will more than double and the product offering will be expanded to include high fructose corn syrup (HFCS) to serve the growing food and beverage industry in the Kingdom of Saudi Arabia. 

“This is an exciting opportunity for both companies to offer our customers – new or existing – a broader portfolio of products and solutions,” said Dr Abdulmalik Alhusseini, Chief Executive Officer, Arasco. “Through this joint venture, we can expand our facilities more quickly and launch new products, such as HFCS to the Kingdom of Saudi Arabia. We are looking forward to working with Cargill to build and strengthen our existing successful corn milling operations in the Kingdom.” 

Going forward, the joint venture will also pave the way for discovering further opportunities for growth in the region and to support customers with other food ingredient solutions. The joint venture has potential for further expansion in line with customer demand. 

Once the agreement is finalised, Cargill will take a 20 percent stake in the joint venture, while Arasco will take a 80 percent stake and management control. The agreement is subject to regulatory approvals. 

Cargill is an international producer and marketer of food, agricultural, financial and industrial products and services. Founded in 1865, the privately held company employs 142,000 people in 65 countries. 

ARASCO was founded in 1983 in Riyadh and has grown steadily to become a prominent agri-food conglomerate with a workforce of more than 2,200. 

Source: Cargill